Lockheed Martin (NYSE: LMT) and Middle East Propulsion Co. (MEPC) have entered into a non-binding memorandum of understanding (MOU) to expand localized production of Terminal High Altitude Areas Defense (THAAD) interceptor canisters in Saudi Arabia.

Under the agreement, the companies will explore increased production of THAAD canisters, expanding a localization contract already in place. This MOU extends the current partnership between Lockheed Martin and MEPC and officially recognizes MEPC as a qualified Lockheed Martin supplier.

“This MOU paves the way to increase localized production of THAAD canisters and expands Lockheed Martin’s global supply chain base,” said Jason Reynolds, vice president of Integrated Air and Missile Defense at Lockheed Martin. “Recent events have highlighted the need for proven air and missile defense systems worldwide, and this agreement deepens Lockheed Martin’s role in helping secure the region from ballistic-missile threats. This partnership with MEPC is part of a broader initiative designed to cultivate local talent, accelerate the transfer of advanced technical knowledge while also bolstering U.S. jobs and fortifying the U.S. defense industrial base.”

Lockheed Martin announced MEPC as a subcontractor for second source through the culmination of the follow milestones:

• 2022: GAMI, Lockheed Martin join forces to localize work on THAAD missile defense system in Saudi Arabia
• 2024:  Lockheed Martin awards localization subcontracts for THAAD Weapon System in the Kingdom of Saudi Arabia
• 2025: MEPC earns second-source qualification status with Lockheed Martin

Localization was a key objective outlined by Saudi Arabia when it signed an agreement with the U.S. government to procure the THAAD Weapon System in 2017. This agreement deepens Lockheed Martin’s relationship with MEPC and drives additional THAAD localization projects, aligning with Saudi Vision 2030. The combat-proven THAAD Weapon System offers regional deterrence and proven capability against a range of ballistic-missile threats.

“We are proud to deepen our partnership with Lockheed Martin through recognition as a second-source supplier for THAAD interceptor canisters that bolster the kingdom’s defensecapabilities,” said Mohammed Al-Nowkhani, Chief Executive Officer, MEPC. “This collaboration aligns directly with Saudi Vision 2030’s goals of industrial diversification and technology transfer, and it underscores our commitment to delivering world-class aerospace solutions while creating high-value jobs for Saudi talent.”